Lugar: Sala de Reuniones del Departamento de Economía nº 2026 (2ª planta del Edificio Los Madroños).

Ponente: Itzel De Haro Lopez (Universidad de Navarra)

Título: Avocados:  Mexico's green gold.  The U.S. opioid crisis and its impact on Mexico's drug cartel violence

Abstract: The growing global demand for avocados has attracted the attention of rent-seeking drug trafficking organizations (DTOs) in Mexico. As a result, farmers and packing houses have become targets of extortion by these organizations. This paper aims to answer whether declining drug revenues have motivated cartels to target licit businesses, such as avocado farms, rather than continue specializing in the production and distribution of illicit drugs. To do this, I exploit exogenous variation from the introduction of Fentanyl in the U.S. to analyze the impact of reduced heroin demand on homicides and cartel presence in avocado and poppy-growing municipalities between 2011 and 2019. Using municipal-level data, I show that the decrease in the demand for heroin increased homicide rates, including those of agricultural workers, and incidents of truckload thefts in avocado-growing municipalities. Moreover, results show no evidence of increased cartel presence in these areas. Consequently, the rise in homicides can be attributed to DTOs resorting to increased violence against civilians rather than territorial expansion. Overall, this paper provides evidence of inter-sector spillovers resulting from drug demand changes.